S&P warns on US debt

[slow99]

That would be like me blaming any dip in silver prices to a strong dollar. LOL!

Seriously. 2% on AUM and 20% performance fee above a watermark, and just pouring into fixed income investments based on a credit agency's rating. That's the equivalent of me recommending an investment to someone b/c I saw that someone had it rated as a good pick...and I don't even earn 2 and 20!

<-- Facepalm

[SMEGMA STENCH]

All of the entitlements that he's trying to shove down our throats?

Yeah that'd be them. He said the elections will decide what america wants. Hopefully we decide we want him to be out of a job.

A lot of people misunderstand the way the term "entitlement" is thrown around.

I just go off of its literal definition. Which seems to pretty closely mirror social security, medicare, and some of the others. If applied to them of course.

[Denny]

Bank Of America Analyst Advocates The "Unthinkable" -- An Intentional Default On US Debt

http://www.businessinsider.com/bank-of-americas-jeffrey-rosenberg-says-the-us-should-default-2011-4#ixzz1JwmOlnEo

[Strychnine]

S&P is racist.

http://www.washingtonpost.com/business/economy/obama_administration_officials_tried_to_keep_sandp_rating_at_stable/2011/04/19/AFfAeO8D_story.html

Obama administration officials tried to keep S&P rating at ‘stable’


by Zachary A. Goldfarb, Tuesday, April 19, 8:55 PM
The Obama administration privately urged Standard & Poor’s in recent weeks not to lower its outlook on the United States — a suggestion the ratings agency ignored Monday, two people familiar with the matter said.

Treasury Department officials had been discussing with S&P whether the ratings agency should change its outlook on the United States to “negative” from “stable,” an indication that the country could lose its crucial AAA rating in coming years over its soaring debt levels.

Treasury officials told S&P analysts that they were underestimating the ability of politicians in Washington to fashion a compromise to curb deficits, a Treasury official said. They argued a change in ratings was not needed at this time because the debt was manageable and the administration had a viable plan in the works, the official said.

But S&P analysts told Treasury officials on Friday that they were unmoved — and released a report that expressed skepticism that the political parties could come together on how to bring spending in line with revenue.

Any doubts by credit rating agencies about government debt has the potential to increase borrowing costs for the Treasury.

It is not uncommon for companies and governments to push back when they don’t agree with a decision made by a credit ratings agency. Sometimes, companies that issue debt — which also pay for the ratings — will shop around for the best rating.

But the U.S. government is an unusual case — it doesn’t solicit ratings. S&P and the other major credit rating agencies offer their judgments notwithstanding.

Spokesmen for the Treasury and S&P declined to comment on the record.

[sc281]

S&P is racist.

http://www.washingtonpost.com/busine...O8D_story.html

They be hatin' on a black President. Of cose dey racist!!

[Denny]

Well, looks like the IMF has its sights set on owning the Fed

[slow99]

Lmfao

Shocking News!

Posted: 19 Apr 2011 07:20 PM PDT

Leaving no stone unturned, the super-analysts of S&P uncovered problems with the US fiscal situation. Unafraid to take drastic action, they left the US debt rating at AAA, but stated that the outlook was negative. (In a separate report this week, they announced that the outlook for John McCain’s 2008 presidential bid had also turned negative.)



The novice might view this change in outlook as miniscule. But, to my trained eye, I think that what they’re really saying is that “US Treasuries might be an even crappier investment than the CDOs that we rated AAA”. My favorite line was when they boldly tip-toed out on the ledge and said, “we believe there is at least a one-in-three likelihood that we could lower our long-term rating on the US within two years.” I think that I liked that line because Jenny frequently tells me that “there’s a one-in-three likelihood”, and I appreciate that she uses that phraseology instead of her old line of “how does the 12th of never sound?” S&P’s assessment is like saying “there’s a one-in-three chance that, in the next two years, we’re going to do what we should have done four years ago.”



When the S&P analysis was released on Monday, one early news story reported that it made House Speaker Boehner cry. Later though, Boehner’s spokesman explained that he had been crying about something else.



Lest I digress, let me tell you what these S&P sleuths uncovered.



The US Maintains AAA Rating Because:

1. “The economy of the US is flexible and highly diversified.” (I agree. Sort of like Enron.)

2. The country’s effective monetary policies have supported growth while containing inflationary pressures.

3. “Consistent global preferences for the US dollar…gives the country unique external liquidity.” (In other words, foreigners like dollars and will loan to us. If that doesn’t make sense to you, it’s sort of how idiot bond investors used to loan money to subprime borrowers. I hope that helps.)

4. We have “adaptable labor markets”. (In fact, 14 million people have adapted to being unemployed.)

5. We have “a long track record of openness to capital flows.” (This is correct. We will let anyone finance us. It’s sort of like taking either cash or credit at the brothel.)



We’ve Spotted Some Problems:

1. Very large deficits.

2. Rising government indebtedness.

3. “The path to addressing these (the deficits and the debt) is not clear to us.” (I’m not sure here if they’re saying that our politicians are terrible or if they’re simply admitting that “it’s not clear to us” sort of like how we missed the financial crisis. It could be either.)

4. Shockingly, they “believe there is a material risk that US policymakers might not reach an agreement on how to address medium and long-term budgetary challenges by 2013.” (Apparently, they detect some sort of extreme partisanship that the rest of us have missed.)

5. “We were driving down the road and all of a sudden, a $50 trillion unfunded liability came out of nowhere and crushed our car.” Okay, that wasn’t really included in the S&P report, but it should have been.



As many of you know, I’ve been concerned about our debt situation and our unfunded liabilities for a long time. But, no more. If S&P tells me that we’re AAA, I’m good with that.

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